Question

Kristin owns a bakery called Kristin’s cakes and n’ such and is considering lowering the price of her cakes. Kristen polls her customers and determines that she can sell 100 cakes each week when she changes $25 each. She also discovers that every $1 decrease in price of the cake, she will sell 5 more cakes. The portion of the graph below represents kristen’s projected weekly revenue for each decrease in price.

Which of the following are true? Select all that apply.

Answer 1

1,3,5
4 looks like true but decreasing but 2 dollars also gives max revenue, so I not sure about it

Answer 2

Answer:

• If Kristin does not decrease the price of her cakes,her projected weekly revenue from cake sales will be $ 2500.

Since if she is not decreasing her price that means the point will be on the Revenue axis.

and the point is 2500.

Hence, the statement is True.

• If Kristin decreases the price of her cakes, her projected weekly revenue will also decrease.

This statement is False as while decreasing the price from $ 2 to $ 3 the revenue remains same.

• If Kristin decreases the price of her cake by $ 1, her projected weekly revenue will be $ 2520.

This statement is True.

Since when there is a decrease in $ 1 this means that 5 cakes increases and price per cake is $ 24.

i.e. 105 cakes are being sold at a rate of $ 24 each.

Hence, the total revenue is:

24×105=$ 2520.

• Kristin should decrease the price of her cake by $ 3 ,in order to obtain the maximum weekly revenue.

This statement is False.

Since, the maximum revenue is obtained when there is no decrease.

• Kristin will receive the same revenue if she sells the cake for $ 24 or $ 21.

This statement is True.

Since when she sells for $ 24 each she has to sell 105 cakes.

so, revenue obtained is:

24×105=$ 2520.

When she sells for $ 21, she has to sell 120 cakes and the revenue obtained is:

20×120=$ 2520.